Real estate body presents pre-budget petition to government
The Karnataka chapter of Confederation of Real Estate Developers' Association of India on Friday urged the state government to reduce stamp duty on immovable properties to 3% from 5%. In a pre-budget memorandum submitted to Chief Minister Siddaramaiah, CREDAI said reduction in stamp duty will not only help the real estate sector overcome the sluggishness but increases revenue to the government. Currently, a property buyer pays 6.5% to the government (5% stamp duty, 1% registration fee and 0.5% cess), it added. CREDAI has also sought reduction in stamp duty on joint development agreements (JDAs) and affordable housing units (less than Rs 50 lakh or up to 60 sq mtr). A JDA is only an understanding between the land owners and the developer to take up a project. The actual transfer of properties happens after the project is developed. Hence, a nominal stamp duty of 0.5% should charged instead of 2%. The Real Estate Regulatory Act which will come into force from May this year, allows sale of sites immediately after registration of the project with Real Estate Regulatory Authority. Hence, the government should allow sale of sites and issue plan sanction at the initial stage of development of residential layouts by amending the Town and Country Planning Act, CREDAI stated. It has also urged the government to take measures to prevent the menace of fraudulent transactions. "At present, any property can be sold any number of times till the entry of the first transaction is made in the R/R (revenue records). Even when there is a registered sale agreement, wrongdoers can execute a sale deed in favour of someone other than the person to whom they have agreed to sell. This is a serious matter which needs to be tackled by all possible means," it said.